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Tax’n’spend

Well, it’s no surprise that the government is a little low on money. Most media reports keep propagating the Rudd spin that this is all caused by the global economic crisis and “decreased revenues” – but they seem to ignore the $100b+ additional spending. And spending is yet to increase further, with heavy borrowing and taxing to pay for it all. The latest round:

THE nation’s big earners, on $150,000 a year or more, will be hit to pay for pension reform.

Yes, we’re back to class warfare… Sure, we’re increasing taxes – but only on rich people, and it’s to pay for pensioners – so that’s ok. Hopefully, we won’t go as far as the UK – who are increasing their top rate from 40% to 50% – but we have in common with the UK the absolute refusal of government to cut spending:

“Either you completely slash and burn everything government does and throw tens of thousands of extra people on to the unemployment queues and cut funding for hospitals and schools, or you engage in temporary borrowing,” he [Rudd] said.

Of course, he doesn’t necessarily need to cut funding to hospitals and schools (which are rightfully state responsibilities anyway), as there are many other areas with lots of fat. Indeed, throwing tens of thousands of public servants on to the unemployment queues would be a net gain – though since most of these vote Labor, I doubt that will ever happen.

We’ll wait and see. I’d like to think that they’re just trying to soften us up for a budget that won’t be all that bad, but I’m sure that’s just wishful thinking.

The economic crisis is just a freaking excuse for the extra spending as the socialists hope people will be confused and not be able to distinguish between what was spending for the crisis and what is going for typical labor porking.

The end result is always higher taxes.

No libertarian should ever again use the Hawke and Keating years as an example of a labor government as that was an aberration.

I warned about this economic hoodlums. Pommy and Fleeced did too I might add.

Labor has not even really delivered on any of what might be called the libertarian social agenda. Their inclination towards Internet censorship has been even worse than the Howard government. They have not reversed the Andrews act. They still discriminate for and against Aborigines. It is hard to find any redeeming feature other than ending the wheat board.

Well, while I don’t agree with it, he has gotten rid of full fee paying domestic places at uni. At least it is as fair as it could be for domestic students now (don’t take this as my support for the measure, I’m against government funding for universities in pretty much all shapes and forms)

Wait a second… we don’t know exactly what the ALP is going to do, but they are talking about decreasing middle-class welfare. Is that really so bad?

The only talk I’ve found about decreasing middle-class welfare is that the FHOG will return to it’s previous level (ie, to what it was before they themselves increased it), and that the baby bonus might be replaced with maternity leave.

Other than that, they’ve been talking about increasing taxes – specifically on the “rich”, to fund their massively increased spending…

Any savings they do make will be dwarfed by new expenditure – hardly what I would call a good thing. It’ll be like Obama’s $100m budget cut after spending hundreds of billions. As Lord Humungus would say, “What a puny plan!”

Then again, it is standard procedure to leak bad news before the budget, so we’ll see – but since they consider “good news” to be about how much they’re spending, I won’t hold my breath.

Steve – how is it fair to ban domestic students from being allowed to purchase education, but allow foreign students to purchase education? Do we really hate Australians that much?

True, but at least now every domestic student is theoretically paying the same. That’s what I meant by fair. I agree with you there though, we should be purchasing it ourselves, rather than letting other people soak it up for us. Now that I’m actually at uni, I’m kicking myself for not taking a gap year to work, I think I would have been much more mature when I got here

Is $150,000 p.a. gross income of a PAYE taxpayer even realistically a “Big Earner” ?

It is of course relatively more than the average income, but hardly by a vast quantum.

Without getting too technical – a household where four people work ( two adults, two older offspring say ) on an average of $50,000 each probably has a lot more after tax disposable income than a single income household on $150 k.

And the real ‘Big Earners’ have their money in corporate dividends, trusts, non-PAYE income etc, much like the PM’s very successful spouse probably does.

So I am inclined to agree with Fleece’s proposition. If this is just an easy impost on the higher tiers of PAYE taxpayers, whose disposable income is probably relatively the same as some of the next tiers down, then it is indeed more about cheap class envy and populism than fiscal necessity.

I hope cheap populism runs out of steam before we sink the economy completely.

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